421. Purchase By Unquoted Trading Company Of Own Shares. | Taxation Law | LexisNexis

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421. Purchase by unquoted trading company of own shares.

A payment made by a company¹ on the redemption, repayment or purchase of its own shares is not a distribution² for the purposes of the Corporation Tax Acts³ if the company is an unquoted⁴ trading company⁵ or the unquoted holding company⁶ of a trading group⁷ and either Condition A or Condition B is met⁸.

Condition A is that:

(1) the redemption, repayment or purchase is made wholly or mainly for the purpose of benefiting a trade carried on by the company or by any of its 75% subsidiaries⁹;
(2) the redemption, repayment or purchase does not form part of a

(10) Company Distributions Etc

406. Corporation tax charge on distributions received.

407. Exemption of distributions received by small companies.

408. Exemption of distributions received by companies that are not small.

409. Distributions from controlled companies.

410. Distributions in respect of non-redeemable ordinary shares.

411. Distributions in respect of portfolio holdings.

412. Distributions derived from transactions not designed to reduce tax.

413. Dividends in respect of shares accounted for as liabilities.

414. Exclusions from exempt classes.

415. Election that distribution should not be exempt.

416. Charge to tax.

417. Returns for certain distributions.

418. Tax certificates.

419. Taxation of non-UK resident recipients of certain distributions.

420. Exempt distributions.

421. Purchase by unquoted trading company of own shares.